Leading global commercial real estate services firm Colliers International Group Inc. (Nasdaq:CIGI) (TSX:CIG) has issued “Energy Perspectives,” a logistics report focusing on North American real estate trends in the oil, gas and petrochemical industries in major office and industrial markets across the U.S. and Canada.
“Our analysis finds that the U.S. shale boom is resulting in oil and gas companies redesigning their business plans and go-to-market strategies to save costs in a surplus market,” says Don Schmidt, national leader of Colliers International Energy Group. “On the other hand, Wall Street investors and capital markets players are focused on not missing a potential second boom and are continuing to invest in the energy sector as a result.”
Colliers’ report focuses on the outlook for the energy industry in respect to real estate and its end users. The analysis also provides insights on market implications and opportunities in the energy sector across the U.S. and Canada.
Key highlights of the report include:
- Changing Use of Space in Kern County: The petroleum industry is the leading employer in Kern County, Calif., home of Bakersfield and the No. 1 crude-oil–producing county in the U.S. The industrial market has added 3,096,500 square feet of new inventory, of which 3,035,600 square feet were build-to-suit and 60,000 square feet speculative; however, none of the build-to-suit inventory has been attributed to the oil industry. In fact, distribution centers account for the majority of the industrial space developed.
- Energy Still Reigns in Houston and is weathering the perfect storm: In Houston, internationally recognized as the global energy capital, 6.9 million square feet, or 85% of the build-to-suit projects under construction, are pre-leased to energy industry companies With all the companies relocating to their new space, and drop in oil prices causing job cutbacks, Houston now has over 7.5 millions square feet of sublease space causing the perfect storm.
- The Shale Boom Impact in the Northeast: The commercial real estate market in Western Pennsylvania has been positively impacted by the exploration of the Marcellus Formation for shale. Recently, several of the globally-diversified energy outfits, together with the oilfield service providers and the gathering-and-midstream companies, have entered the market, all seeking to capitalize on the liquids-rich shale play.
- Calgary Rates Dropping: Calgary is the oil and gas center of Canada, containing the highest number of head offices. Its 3.8 million square feet of new construction is causing concern among landlords as deal activity remains low. This is creating great leasing opportunities for tenants with low rental rates.